Breaking News: AOL set to acquire major stake in Satyam Infoway
Arun Kumar (New Delhi, December 9)
The $173 billion America On line (AOL) is all set to acquire a substantial stake in Satyam Infoway, the internet subsidiary of Satyam Computer Services Ltd. As per available information, detailed discussions on this proposed acquistion have taken place between top brass of the two companies.
When contacted B Ramalinga Raju, chairman of Satyam Computer, refused to comment. "It would be improper to comment on a business plan", he remarked.
However, when specifically asked to deny the same, he said. "we are looking at various opportunities to raise funds and such discussions are part of that exercise".
Without naming the company, Raju said that Satyam Infoway is looking at various options to raise the necessary funds to meet its requirements.
The option being explored include the fresh issue of shares either in the domestic market or in the overseas market. The company may also consider raising the funds from venture capitalists.
On the performance of Satyam Infoway, Raju said that the company's subscriber base is growing very fast and has already crossed one lakh.
It may be recalled that Satyam Infoway made a history of sorts in November 1999 when it made the biggest acquisition in the field of internet portals by taking control of the IndiaWorld.com site for US $115 million equivalent to nearly Rs 499 crore. The transaction was all cash.
As a first step, Satyam Infoway had acquired 24.5 per cent of the outstanding shares of IndiaWorld for US $ 28 million (Rs 122.2 crore). Apart from this, Satyam has also acquired the option to purchase the remaining 75.5 per cent of the outstanding IndiaWorld shares any time before June 30, 2000 for an exercise price of US $ 87 million (Rs 376.5 crore). Against this option, Stayam Infoway has also made a non-refundable deposit of US $ 12 million. Following the acquisition the market capitalisation of Stayam Infoway has jumped by over 30 per cent to reach US $ 2.91 billion on the very first day.
Currently, the market capitalisation of Satyam Infoway is over US $ 3 billion. In order to meet these outstanding payments as well as to acquire other companies, Satyam Infoway will have to raise fresh funds.
Interestingly, America On Line was also in the race to acquire IndiaWorld so as to enter the Indian portal market .
Market sources said that Satyam Infoway had already reached an understanding with America On Line even before the acquisition of IndiaWorld. The market grapevine has it that America On Line will acquire a stake which would be between 30 to 35 per cent in Satyam Infoway.
hindustantimes.com |
